A-Level Business

People have needs 需要 (things you must have, like food and shelter) and wants 欲望 (things you would like, like a phone or a holiday). A business exists to meet these needs and wants by making goods 商品 and services 服务.

Shops competing on a high street — the market a business operates in.

To do this, a business uses resources 资源. We sort resources into four factors of production 生产要素:

• land 土地 — natural things, such as soil, water and minerals.
• labour 劳动力 — the work done by people.
• capital 资本 — the machines, tools, buildings and money used to produce.
• enterprise 创业精神 — the skill of bringing the other three together and taking the risk 风险 to start a business.

Land, labour, capital and enterprise are the four factors a business combines to make goods and services

Resources are scarce 稀缺 — there are not enough to meet everyone's wants. So every business must choose how to use them well.

Adding value 增值 means the selling price of a product is higher than the cost of the inputs 投入 (the bought-in materials) used to make it.

Value added is the selling price minus the cost of bought-in materials

A business can add value by branding 品牌, better quality, good design, fast service, or convenience. More value added can mean more profit 利润, but only if costs stay under control.

An entrepreneur 企业家 is a person who takes the risk to set up and run a business. They have the idea, organise the factors of production, and make the decisions. If the business fails, they can lose their money.

An intrapreneur 内部创业者 is an employee inside a larger business who acts like an entrepreneur. They build new ideas, products or ways of working, using the company's resources.

Characteristics of successful entrepreneurs

Successful entrepreneurs are usually:

• innovative 有创新精神的 — full of new ideas.
• willing to take risks, but in a careful way.
• hard-working and determined 有决心的 — they do not give up easily.
• self-confident 自信的 and good at making decisions.
• good leaders who can plan ahead and manage money.

Why enterprise matters to a country

When people start new businesses (business start-ups 初创企业), the whole country can gain:

• new jobs are created, which lowers unemployment 失业.
• more goods and services are made, which raises output 产出 (and the country's GDP 国内生产总值).
• more competition 竞争, giving customers lower prices and more choice.
• some firms grow and export 出口, bringing money into the country.
• economic growth 经济增长 and a higher standard of living.

A business plan 商业计划书 is a written document that describes the business idea and how it will work. It usually contains:

A business plan is useful because it helps the owner:

• get finance 融资 from a bank or an investor 投资者.
• set clear goals and lower the risk of failure.
• guide decisions as the business grows.

Every business works in one of four sectors:

Business activity runs from the primary sector through to the quaternary sector

Here raw materials 原材料 are the natural inputs a business starts with, and to manufacture 制造 means to make goods in large amounts. As a country develops, it usually moves from mostly primary work towards more tertiary and quaternary work.

• The private sector 私营部门 is made up of businesses owned by private people. Their main aim is usually profit.
• The public sector 公共部门 is made up of organisations owned by the government, such as state schools and public hospitals. Their aim is usually to provide a service, not to make profit.

A company headquarters: businesses range from sole traders to giant public limited companies.

A business must choose a legal form. The main ones are below.

• A sole trader 个体经营者 is owned by one person. It is easy to set up and the owner keeps all the profit, but raising money is hard.
• A partnership 合伙企业 is owned by two or more partners who share the work and profit. They often sign a deed of partnership 合伙协议 that sets out each partner's share.
• A private limited company 私人有限公司 (Ltd) sells shares 股份 to a small group, such as family and friends. Its owners are shareholders 股东. Its shares are not sold to the public.
• A public limited company 上市公司 (plc) sells its shares to the public on the stock exchange 证券交易所. It can raise large amounts of money, but it must follow more rules and faces the risk of a takeover 收购.
• A franchise 特许经营 lets one firm use another firm's brand and business model. The franchisor 特许方 owns the brand; the franchisee 加盟方 pays a fee and a royalty 提成 to run a branch.
• A joint venture 合资企业 is when two businesses join to run one project and share the costs and risks.
• A social enterprise 社会企业 trades like a normal business but aims to do social or environmental 环境 good, and reinvests most of its profit.

Legal forms split by liability: unincorporated (unlimited) and incorporated (limited)

Liability 责任 means who must pay the business's debts 债务 if it cannot pay them itself.

• limited liability 有限责任 — the owners can only lose the money they put in. Their personal things, like a house or car, are safe. Companies have limited liability.
• unlimited liability 无限责任 — the owners are personally responsible for all the debts. They could lose personal things. Sole traders and most partnerships have unlimited liability.

A company is a separate legal identity 独立法人 — it can own things, owe money, and be taken to court in its own name, apart from its owners.

There is no single best way to measure how big a business is. Common measures are:

• the number of employees 员工.
• revenue 营业收入 (also called sales turnover) — the value of what it sells.
• capital employed 所用资本 — the total money invested in the business.
• market share 市场份额 — the firm's sales as a percentage of the whole market.
• market capitalisation 市值 — the total value of a company's shares (for a plc).

Different measures can give different answers, so it is best to use more than one.

Why small businesses matter

Small businesses create jobs, serve local communities 社区, give personal service, react quickly to change, bring new ideas, and supply parts and services to large firms.

A business can grow in two ways.

Internal growth 内部增长 (organic growth) — the business grows by itself: selling more, opening new branches, or adding new products. It is slower but lower risk.

External growth 外部增长 — the business joins with another firm. This is called integration 整合, and it happens by:

• a merger 合并 — two firms agree to join together as one.
• a takeover — one firm buys control of another.

There are three types of integration:

• horizontal integration 横向整合 — joining a firm at the same stage in the same industry (e.g. two car makers).
• vertical integration 纵向整合 — joining a firm at a different stage in the same industry. Forward integration 前向整合 is towards the customer (e.g. buying a shop); backward integration 后向整合 is towards the supplier (e.g. buying a parts maker).
• conglomerate integration 混合整合 — joining a firm in a completely different industry. This spreads risk, which is called diversification 多元化.

The three types of integration when one firm joins with another

Firms grow to lower their costs, win a bigger market share and more market power 市场支配力, raise profit, and spread risk. But growth also brings problems: higher average costs, harder management and communication, different company cultures 企业文化 that may clash, and a need for a lot of finance.

Economies of scale 规模经济 are the cost savings a business gets as it grows larger. The average cost 平均成本 of each unit falls as output rises. The main types are:

Diseconomies of scale 规模不经济 happen when a firm grows too big and the average cost starts to rise again. The usual causes are:

• communication 沟通 becomes slow and unclear.
• the coordination 协调 of many departments is hard.
• workers may feel unimportant and lose motivation 激励.

Average cost per unit falls (economies of scale) then rises (diseconomies of scale) as a firm grows

A mission statement 使命宣言 is a short sentence that says why the business exists and what it wants to be. It guides everyone in the firm.

From the mission come aims 目的 (broad, long-term goals), and then objectives 目标 (the specific targets that help reach the aims).

Good objectives are SMART — the first letters of:

• Specific 具体的 — clear and exact.
• Measurable 可衡量的 — you can check it with numbers.
• Achievable 可实现的 — it is possible to reach.
• Realistic 现实的 — sensible for the resources you have.
• Time-bound 有时限的 — it has a deadline.

A strategy 战略 is the long-term plan to meet objectives. Tactics 策略 are the short-term actions that carry out the strategy. Objectives are shaped by the size and age of the firm, who owns it, the company culture, and conditions in the market.

Corporate social responsibility 企业社会责任 (CSR) is the idea that a business should act in the best interests of society and the environment, not just make profit. Examples are treating workers fairly, cutting pollution 污染, and helping the local community.

A firm's objectives can change over time. A new firm may aim to survive; later it may aim to grow; a large, safe firm may focus on profit or CSR.

A stakeholder 利益相关者 is any person or group with an interest in a business and how well it does.

Internal and external stakeholders all have an interest in the business

Internal stakeholders 内部利益相关者 are inside the business:

• owners and shareholders — want profit and a good return.
• managers 管理者 — want growth, job security and bonuses.
• employees — want fair pay, safe work and job security.

External stakeholders 外部利益相关者 are outside the business:

Why stakeholder objectives conflict

Stakeholders often want different things, so their objectives can conflict 冲突 (clash). For example:

• owners want higher profit, but employees want higher pay — and higher pay lowers profit.
• customers want low prices, but owners want a high profit margin.
• the local community wants less pollution, but cutting pollution can raise costs.

How conflict can be managed

• keep good communication with every group.
• compromise 妥协 — give each group part of what it wants.
• negotiation 谈判 — talk until the groups reach an agreement.
• decide which stakeholders matter most for each decision, and act on that.

Human resource management 人力资源管理 (HRM) is the part of a business that looks after its people. Good HRM makes sure the firm has enough staff, with the right skills, who are well trained and motivated.

Managers plan and organise the workforce — the core of human resource management.

The main roles of HRM are:

• workforce planning 人力规划 — working out how many staff, and what skills, the business will need in the future.
• recruitment 招聘 and selection 甄选 — finding people to apply for jobs, then choosing the best.
• training 培训 and development 培养 — improving staff skills now and helping them grow for the future.

Workforce planning looks at the firm's plans, then at the staff it already has, to find the gap. The gap may be filled by hiring, training, or moving staff.

To recruit, the firm first writes:

• a job description 职位描述 — the title, duties and tasks of the job.
• a person specification 人员规格 — the skills, qualifications 资格 and qualities the right person should have.

The firm can recruit from inside or outside:

• internal recruitment 内部招聘 — filling the job with someone who already works there. It is cheaper and faster, and the person is known, but no new ideas come in.
• external recruitment 外部招聘 — hiring someone from outside. It brings new skills and ideas, but costs more and is slower.

Selection methods include reading application forms and CVs, interviews 面试, tests, and group tasks.

Training improves the skills staff need to do their jobs well. Common types are:

• induction training 入职培训 — given to new staff so they learn how the firm works.
• on-the-job training 在岗培训 — learning while doing the real job.
• off-the-job training 脱产培训 — learning away from the workplace, such as a course.

Training costs time and money, but it raises quality, productivity 生产率 and motivation, and helps keep staff.

Sometimes a worker has to leave.

• redundancy 裁员 happens when the job itself is no longer needed — for example, when a machine replaces it. It is not the worker's fault.
• dismissal 解雇 happens when a worker is made to leave because of poor work or bad behaviour.

Both sides have rights and duties. The employer 雇主 must follow the law on pay, safety, working hours and unfair dismissal. The employee 雇员 must work as agreed and follow safe, fair rules. These rights 权利 protect both sides.

Businesses change often — new technology, new markets, or restructuring 重组. The management of change 变革管理 in HR means planning the change, explaining it clearly, training staff for new roles, and listening to worries, so staff accept the change instead of resisting it.

Two simple measures help managers judge how the workforce is doing.

Labour turnover 员工流失率 shows the percentage of staff who leave in a year:

High labour turnover can mean low pay, poor motivation or weak management. It raises the cost of recruiting and training.

Labour productivity 劳动生产率 shows the output made by each worker:

Higher labour productivity lowers the cost of each unit, so the firm can compete better.

Motivation 激励 is the desire to work hard and do a good job. Motivated staff produce more and better work, take fewer days off, stay longer, and give better service. So motivation lowers costs and raises quality.

Maslow's hierarchy of needs, with workplace examples at each level.

Several thinkers tried to explain what motivates people. You should know the main idea of each.

Maslow's hierarchy of needs

Maslow said people try to meet lower needs first, then move up:

1. physiological needs 生理需求 — food, water, rest (met by pay).
2. safety needs — a safe job and workplace.
3. social needs — friendship and being part of a team.
4. esteem needs 尊重需求 — respect and recognition 认可.
5. self-actualisation 自我实现 — reaching your full potential.

Maslow's hierarchy: people meet lower needs before higher ones

Herzberg's two factors

• hygiene factors 保健因素 — things like pay, conditions and rules. If they are poor, staff are unhappy; but fixing them does not truly motivate.
• motivators 激励因素 — things like achievement, responsibility and recognition. These give real, lasting motivation.

Hygiene factors stop unhappiness; only motivators give real, lasting motivation

Financial motivators 经济激励 are rewards paid in money:

• wages 工资 — pay by the hour or week, often for manual work 体力劳动.
• salary 薪水 — a fixed yearly amount, paid monthly.
• piece rate — pay for each unit made.
• commission 佣金 — pay based on how much you sell.
• bonus 奖金 — an extra payment for good results.
• profit sharing 利润分享 — staff get a share of the firm's profit.
• performance-related pay 绩效工资 — extra pay for those who meet targets.
• fringe benefits 附加福利 — non-cash extras, such as a company car or health care.

Non-financial motivators 非经济激励 reward staff without extra money, by making work more interesting and giving more control:

• job enrichment 工作丰富化 — giving more challenging tasks and responsibility.
• job rotation 工作轮换 — moving between different tasks to reduce boredom.
• job enlargement 工作扩大化 — adding more tasks at the same level.
• empowerment 授权 — letting staff make their own decisions about their work.
• teamworking 团队合作 — organising staff into teams that share goals.

Motivators are either financial (money) or non-financial (better, fuller work)

Management 管理 means getting work done through other people to reach the firm's objectives.

Fayol said managers carry out five functions:

Fayol's five functions of management form a repeating cycle

Mintzberg said managers also play ten roles 角色 in three groups: interpersonal (working with people), informational (sharing information), and decisional (making decisions). This shows that real management is busy and varied, not just the five neat functions.

Leadership 领导 and management are not the same.

• a manager plans, organises and controls the day-to-day work.
• a leader sets a vision 愿景, inspires people, and guides change.

The best managers are also good leaders. Effective management matters because it raises productivity, keeps good staff, helps the firm adapt to change, and turns plans into real results.

Marketing 市场营销 is the job of finding out what customers want, then making and selling products that meet those wants at a profit. Good marketing links the business to its market 市场 (all the buyers and sellers of a product).

A business can be:

• product-orientated 产品导向 — it focuses on the product first and hopes customers will buy it. This suits new or technical products.
• market-orientated 市场导向 — it finds out what customers want first, then makes it. This lowers the risk of failure.

Customer relationship marketing 客户关系营销 (CRM) means building long-term links with customers so they come back again. Keeping a customer is cheaper than finding a new one.

• market size 市场规模 — the total sales of all firms in a market, by value or by number of units.
• market growth 市场增长 — how fast the market is getting bigger, shown as a percentage.
• market share 市场份额 — one firm's sales as a percentage of the total market:

A rising market share is a sign of strong marketing.

• a mass market 大众市场 is large, with products aimed at most buyers (e.g. soft drinks). Sales are high, but competition is strong.
• a niche market 利基市场 is a small part of a market with special needs (e.g. left-handed tools). Competition is weaker, but sales are smaller.

Market segmentation 市场细分 means splitting a market into groups (segments 细分市场) of buyers who are alike. Common ways to segment are by age, income, gender, location, and lifestyle. Segmentation lets a firm aim the right product and message at each group, which raises sales and cuts waste.

Demand 需求 is how much of a product buyers will buy at each price. Supply 供给 is how much sellers will offer at each price. Usually, when price falls, demand rises.

Supply and demand meet at the equilibrium market price

Elasticity 弹性 measures how strongly demand reacts to a change. You should know three types.

Price elasticity of demand 需求价格弹性 (PED) measures how demand reacts to a price change:

• if PED is greater than 1, demand is price elastic 富有弹性 — a small price cut raises sales a lot, so lowering price can raise revenue.
• if PED is less than 1, demand is price inelastic 缺乏弹性 — demand changes little, so raising price can raise revenue.

The same price fall raises quantity a lot when demand is elastic, only a little when inelastic

Income elasticity of demand 需求收入弹性 (YED) measures how demand reacts to a change in customers' income. Luxury goods react strongly; basic goods react weakly.

Cross elasticity of demand 需求交叉弹性 (XED) measures how the demand for one product reacts to a price change of another. It is positive for substitutes 替代品 (e.g. tea and coffee) and negative for complements 互补品 (e.g. cars and fuel).

Elasticity is useful because it helps a firm predict how a price change will affect sales and revenue.

Market research 市场调研 is collecting and studying information about customers, competitors 竞争对手 and the market.

• primary research 一手调研 — new information you collect yourself, by surveys, interviews or observation. It fits your exact needs, but costs more and takes time.
• secondary research 二手调研 — information that already exists, such as reports, websites and sales records. It is cheap and quick, but may be old or not exactly right.

Data can be:

• quantitative data 定量数据 — facts in numbers (e.g. "60% buy weekly"). Easy to compare.
• qualitative data 定性数据 — opinions and reasons (e.g. "why people like the brand"). Gives deeper understanding.

Sampling and reliability

A sample 样本 is the small group of people asked, chosen to stand for the whole market. Sampling 抽样 methods include:

• random sampling 随机抽样 — everyone has an equal chance of being picked.
• quota sampling 配额抽样 — set numbers from each group are asked.
• stratified sampling 分层抽样 — the sample copies the make-up of the whole market.

A larger, well-chosen sample gives more reliable 可靠的 results. Poor sampling can cause bias 偏差, which makes the findings wrong. Results are often shown in tables and charts, then read carefully to guide decisions.

A branded shop window — branding and place help sell the product.

The marketing mix 营销组合 is the set of choices a firm makes to sell a product. It is often called the 4Ps:

The marketing mix combines the four Ps

The four parts must work together. For example, a high price needs high quality and a good image. Making the parts fit each other is called integration 整合.

A good product is the heart of the mix.

Product development 产品开发 is the work of designing and improving products to meet customer needs and beat rivals.

The product life cycle

The product life cycle 产品生命周期 shows the sales of a product over time, in four stages:

1. introduction 引入期 — launch; low sales, high promotion cost.
2. growth 成长期 — sales rise quickly.
3. maturity 成熟期 — sales reach their peak and level off.
4. decline 衰退期 — sales fall as tastes change.

Sales of a product over its four life-cycle stages, with an extension strategy in maturity

To keep sales up in maturity, firms use extension strategies 延长策略, such as new packaging, new uses, or selling in new markets.

The product portfolio (Boston Matrix)

The product portfolio 产品组合 is the full range of products a firm sells. The Boston Matrix 波士顿矩阵 sorts products by market share and market growth:

The Boston Matrix sorts products by market share and market growth

Stars need investment but may become cash cows. Cash cows bring steady profit. Question marks are risky. Dogs are usually dropped.

Branding

Branding 品牌 gives a product a name, design and image that customers recognise. A strong brand builds loyalty 忠诚度, lets the firm charge more, and makes new products easier to launch.

Choosing a price is a key decision. The main methods and strategies are:

The best price depends on costs, competitors, the product's life-cycle stage, and how price elastic demand is.

Advertising on giant screens — promotion is part of the marketing mix.

Place is how the product reaches the customer, through a distribution channel 分销渠道. A short channel (maker → customer) gives more control; a longer channel (maker → wholesaler 批发商 → shop → customer) reaches more buyers.

A short channel gives more control; a longer channel reaches more buyers

Promotion tells customers about a product and persuades them to buy. It is split into:

• above-the-line promotion 大众媒体广告 — paid advertising 广告 in mass media, such as TV and online ads, aimed at a wide audience.
• below-the-line promotion 直接促销 — targeted methods the firm controls, such as discounts, free samples and direct mail.

Digital marketing 数字营销 and e-commerce 电子商务 (buying and selling online) now play a huge role. They let small firms reach world markets cheaply, target adverts to the right people, and sell at any time of day.

Operations 运营 is the part of a business that makes the product. Operations management 运营管理 is the job of turning inputs 投入 into outputs 产出 well.

A distribution centre: operations management turns inputs into finished goods ready for customers.

This is the transformation process 转化过程:

• inputs — raw materials, labour, machines and money.
• process — the work that changes the inputs.
• outputs — finished goods and services for the customer.

Operations turn inputs into outputs, adding value along the way

Good operations add value 增值: the output is worth more than the inputs used to make it. Using raw materials 原材料 (the basic materials a business starts with) well is a big part of this.

Productivity 生产率 measures how much output you get from your inputs:

Efficiency 效率 means making products with as little waste of time, materials and money as possible. Higher productivity and efficiency lower the cost of each unit, so the firm can charge less or earn more.

• a capital-intensive 资本密集型 operation uses mostly machines (e.g. a car factory). It has high set-up costs but low cost per unit, and is good for large amounts.
• a labour-intensive 劳动密集型 operation uses mostly people (e.g. a hair salon). It is flexible and good for personal service, but quality can vary.

A firm chooses how to organise production to suit its product and demand.

A car assembly line: flow production of identical units, one stage after another

The three methods of production

Job production is flexible but costly per unit. Flow production has a low unit cost but needs high, steady demand.

Sustainability 可持续性 means meeting today's needs without harming the future or the planet. Sustainable operations cut waste, use less energy, recycle, and use materials that can be replaced.

Technology 技术 is widely used in operations. Automation 自动化 (machines and robots doing tasks) raises output, improves quality and lowers cost, but it has a high set-up cost and can replace jobs.

Inventory 库存 (stock) is the goods a business holds: raw materials, part-finished goods, and finished goods waiting to be sold.

A firm holds inventory so it can keep producing and meet customer orders quickly. But holding inventory has costs:

• holding costs 持有成本 — storage, insurance, and money tied up in stock.
• the risk that goods go out of date or are damaged.

Holding too little stock is also risky: the firm may run out and lose sales.

An inventory control chart 库存控制图 shows how stock rises when an order arrives and falls as it is used. Key terms:

• re-order level 再订货水平 — the stock level at which a new order is placed.
• lead time 交货周期 — the time between placing an order and receiving it.
• buffer inventory 缓冲库存 — a minimum "safety" stock kept in case of delays or extra demand.
• maximum inventory 最大库存 — the most stock the firm wants to hold.

Stock is used up, then replenished when a new order arrives after the lead time

There are two main ways to manage stock.

• just-in-time 准时制 (JIT) — stock arrives only as it is needed, so almost no inventory is held. This cuts holding costs and waste, but a late delivery can stop production.
• just-in-case 备货制 — extra stock is held in case of problems. This is safer but costs more to store.

Capacity 产能 is the most a business can produce with its current resources. Capacity utilisation 产能利用率 shows how much of that capacity is being used:

• under-utilisation 产能利用不足 (a low figure) means resources sit idle, so the fixed cost spread over each unit is high.
• over-utilisation 产能过度利用 (very close to 100%) leaves no time for repairs, can tire staff, and may lower quality.

Most firms aim for a high but not full level, around 85–90%.

Outsourcing 外包 means paying another firm (a supplier 供应商) to do work the business used to do itself, such as cleaning, IT or making parts.

Benefits: it can be cheaper, lets the firm focus on what it does best, and adds flexibility. Drawbacks: less control over quality, possible delays, and the risk of sharing secrets with another firm.

Business finance 企业资金 is the money a firm needs to start, run and grow. A new firm needs money to buy premises 经营场所 and equipment; a growing firm needs money for new projects; and every firm needs money to pay day-to-day bills.

Banks are a key external source of finance, through loans and overdrafts.

Spending falls into two types:

• capital expenditure 资本性支出 — money spent on fixed assets 固定资产 that last a long time, such as machines, vehicles and buildings.
• revenue expenditure 收益性支出 — money spent on day-to-day running, such as wages, rent and raw materials.

Working capital 营运资本 is the money a firm has for its daily needs. It is found from the balance sheet 资产负债表:

Here current assets 流动资产 are things that become cash within a year (cash, inventory, money owed by customers), and current liabilities 流动负债 are debts due within a year. Too little working capital is dangerous — the firm may not be able to pay its bills.

This is a key idea.

• profit 利润 is what is left when total costs are taken from total revenue over a period.
• cash 现金 is the money the firm actually has right now to spend.

A firm can be profitable but still run out of cash — for example, if it sells goods but customers have not paid yet. Many firms fail not from low profit, but from running out of cash.

A stock exchange: public limited companies raise finance by selling shares.

Finance can come from inside the business (internal sources 内部来源) or from outside (external sources 外部来源). It can also be short-term 短期 (paid back within a year) or long-term 长期.

Sources of finance come from inside the business (internal) or outside it (external)

There is no single best source. The choice depends on:

• the amount needed — large amounts may need shares or a long loan.
• the purpose — long-term assets should use long-term finance.
• the cost — interest and fees differ between sources.
• the legal structure — only a company can sell shares.
• how much the firm already owes, and whether it can offer collateral 抵押品 (an asset the lender can take if the loan is not repaid).

A cash-flow forecast 现金流量预测 predicts the cash coming in and going out each month. It helps a firm spot a shortage early.

• cash inflows 现金流入 — money coming in, mostly from sales.
• cash outflows 现金流出 — money going out, such as wages and rent.
• net cash flow 净现金流 — inflows minus outflows for the period.

The opening balance 期初余额 is the cash at the start of the month. Adding net cash flow gives the closing balance 期末余额, which becomes next month's opening balance.

A cash-flow forecast tracks the closing balance each month, warning of a shortage early

Common causes of cash-flow problems are: too many sales on credit, holding too much stock, buying too many assets at once, and overtrading 过度交易 (growing too fast for the cash available).

Ways to improve cash flow:

• bring cash in sooner — ask customers to pay faster, or offer discounts for quick payment.
• delay cash going out — agree longer trade credit with suppliers.
• arrange an overdraft or short loan to cover a gap.
• hold less stock to free up cash.

Good working capital management keeps enough cash to stay safe without holding so much that money sits idle.

A cost 成本 is money the business spends to make its product. We sort costs in several ways:

• fixed costs 固定成本 — costs that do not change with output, such as rent.
• variable costs 可变成本 — costs that rise and fall with output, such as raw materials.
• direct costs 直接成本 — costs clearly linked to one product, such as its materials.
• indirect costs 间接成本 (overheads) — costs not linked to one product, such as manager salaries.
• marginal cost 边际成本 — the cost of making one more unit.
• average cost 平均成本 — the cost per unit, found by total cost ÷ number of units.

Total cost = fixed cost + variable cost; only variable cost rises with output

Cost information helps managers set prices, choose what to make, and control spending.

Contribution 贡献 is how much each sale adds towards paying the fixed costs:

Break-even 盈亏平衡 is the point where total revenue equals total costs, so profit is zero. The break-even point 盈亏平衡点 in units is:

The break-even point is where total revenue equals total cost — left of it is loss, right of it is profit

The margin of safety 安全边际 is how far current sales are above the break-even point:

A large margin of safety means sales can fall a lot before the firm makes a loss. Break-even analysis is quick and useful, but it has limitations 局限性: it assumes the selling price and costs stay the same, and that everything made is sold.

A budget 预算 is a financial plan for the future — a target for income or spending. Budgets help a firm plan, control money, and check performance. Two types are:

• incremental budget 增量预算 — last year's budget changed by a small amount.
• zero-based budget 零基预算 — every cost must be explained from zero each year.

A variance 差异 is the difference between the budgeted figure and the actual figure:

• a favourable variance 有利差异 is better for profit (costs lower, or revenue higher, than planned).
• an adverse variance 不利差异 is worse for profit (costs higher, or revenue lower, than planned).

Studying variances shows managers where the plan went wrong, so they can act.

A business cannot control everything. External influences 外部影响 are forces outside the firm that affect how it works. The firm must watch them and adapt. We group them into economic factors and wider (political, legal, social and other) factors.

Stacked shipping containers: globalisation lets firms trade and produce worldwide.

The business cycle 经济周期 is the way the whole economy rises and falls over time. It has four stages:

• boom 繁荣 — fast growth; high demand, but rising costs and prices.
• recession 衰退 — falling demand and output; sales drop and some firms close.
• slump 萧条 — a deep, long recession with very low demand.
• recovery 复苏 — demand and output start to rise again.

The business cycle moves through boom, recession, slump and recovery around the long-term trend

In a boom, firms expand; in a recession, they cut costs, hold less stock, and may aim only to survive.

The interest rate 利率 is the price of borrowing money, set as a percentage. When interest rates rise:

• loans and mortgages cost more, so customers spend less.
• firms with loans pay more, which lowers their profit.
• new investment is less likely, because borrowing is dear.

When interest rates fall, the opposite happens and spending usually rises.

The exchange rate 汇率 is the price of one currency in terms of another. It changes all the time.

• if the local currency rises in value (appreciation 升值), exports become dearer abroad and imports become cheaper.
• if the local currency falls in value (depreciation 贬值), exports become cheaper abroad and imports become dearer.

So an exporter 出口商 often gains from a weaker currency, while an importer 进口商 often gains from a stronger one.

Inflation 通货膨胀 is a general rise in prices over time. High inflation raises a firm's costs (materials and wages), makes planning harder, and can cut what customers can afford to buy. Low, steady inflation is usually best for business.

Taxation 税收 is money the government takes from people and firms.

• a direct tax 直接税 is taken from income or profit (e.g. income tax, corporation tax).
• an indirect tax 间接税 is added to spending (e.g. sales tax on goods).

Higher taxes leave people and firms with less money to spend, so demand falls.

Unemployment 失业 is the number of people who want work but cannot find it. High unemployment lowers demand, but it also makes workers easier and cheaper to hire.

A multinational's outlets look the same worldwide — a global brand operating across many legal and social settings.

• political 政治 — government decisions, trade rules and stability affect how firms plan.
• legal 法律 — firms must obey legislation 法规 on employment, consumer safety, competition and the environment. Breaking the law brings fines and bad publicity.
• social 社会 — changes in society, such as ageing populations or new tastes, change what people buy.

• technological 技术 — new technology can create new products and cut costs, but firms must keep up or fall behind.
• environmental 环境 — firms face pressure and rules to cut pollution and waste, and to act in a sustainable way.
• ethical 道德 — acting in a morally right way (fair pay, honest selling) builds trust, even if it costs more.

Together these wider factors are often studied with a PESTLE analysis 宏观环境分析, which checks Political, Economic, Social, Technological, Legal and Environmental forces.

PESTLE groups the six wider external forces that act on a business

A strategy 战略 is a long-term plan to reach the firm's main objectives. Strategic management 战略管理 is the work of setting that plan, putting it into action, and checking it. Good strategy aims to build a competitive advantage 竞争优势 — a reason customers choose you over rivals, such as lower cost or a better product.

A SWOT analysis SWOT分析 studies a firm's position under four headings:

SWOT analysis: internal strengths and weaknesses, external opportunities and threats

A firm should use its strengths to take opportunities, and fix or protect against its weaknesses and threats.

Firms use other tools to make decisions, such as decision trees (weighing choices by their likely results) and the matrices you meet later in marketing and operations. Every planning tool turns information about the business and its environment into a clearer choice.

A decision tree weighs each choice by the probability and payoff of its outcomes

An organisational structure 组织结构 shows how a business arranges its people: who reports to whom, and who does what. A good structure makes roles clear and helps the firm meet its objectives. It is often drawn as an organisation chart.

• a hierarchy 层级 is the set of levels in a firm, from the top managers down to the shop-floor workers. A "tall" structure has many levels; a "flat" structure has few.
• the chain of command 指挥链 is the line along which orders pass down, from the top to the bottom.
• the span of control 管理幅度 is the number of staff one manager is directly in charge of. A wide span means many staff per manager; a narrow span means few.

An organisation chart shows the chain of command and each manager's span of control

A tall structure has narrow spans and a long chain of command, so messages travel slowly. A flat structure has wide spans, so managers must trust staff more.

Tall structures have many levels and narrow spans; flat structures have few levels and wide spans

• centralisation 集权 — most decisions are made at the top. This gives strong control and quick, consistent decisions, but ignores local knowledge.
• decentralisation 分权 — decisions are shared out to lower levels and local branches. This speeds up decisions and motivates staff, but control is weaker.

Most firms sit somewhere between the two.

Delayering 精简层级 means removing one or more levels of management. It cuts cost and shortens the chain of command, but it gives the remaining managers more to do.

A matrix structure 矩阵结构 groups staff by both their department and the project they work on, so a worker may report to two managers. It is good for teamwork across departments, but the two-boss system can cause confusion.

In a matrix structure a worker reports to two managers — a function manager and a project manager

Delegation 授权 means a manager gives a task, and the power to do it, to a more junior worker. It frees the manager's time, develops staff, and motivates them.

But a manager who delegates is still accountable — the accountability 问责 for the result stays with them. So managers must delegate to people they trust, and still check the outcome.

Communication 沟通 is the passing of a message from one person to another. Effective communication follows a clear path:

• a sender 发送者 has a message.
• the message is sent through a medium 媒介 (e.g. a meeting, email or notice).
• a receiver 接收者 takes in the message.
• feedback 反馈 shows the message was understood.

The message flows from sender to receiver, and feedback confirms it was understood

Good communication raises motivation, cuts mistakes, and speeds up decisions. Methods can be verbal (spoken), written, or visual; the best method depends on the message, the cost, and the need for a record.

A barrier 障碍 is anything that stops a message getting through clearly. Common barriers are:

• a message that is too long or unclear.
• a poor medium (e.g. a noisy phone line).
• too many levels in the hierarchy, so the message is changed on the way.
• language or cultural differences, and lack of trust.

To improve communication, a firm can shorten the chain of command, choose the right medium, keep messages short and clear, and always ask for feedback.

Leaders set direction and motivate people, which shapes the whole organisation.

A leadership style 领导风格 is the way a leader 领导 makes decisions and treats staff. Four styles are:

No style is always best. The right one depends on the task, the staff, and the time available — an urgent crisis may need an autocratic style, while skilled staff may work best under a democratic or laissez-faire one.

Emotional intelligence 情商 is a leader's skill in understanding their own and other people's feelings, and managing them well. Leaders with high emotional intelligence build trust and handle conflict better.

This matters most when leading change. People often resist change because they fear losing their job or status. A good leader explains why the change is needed, involves staff, and supports them through it.

There are two broad approaches to human resource management 人力资源管理 (HRM):

• hard HRM 硬性人力资源管理 treats staff as a resource like any other — to be used at the lowest cost. It uses tight control and short-term contracts.
• soft HRM 软性人力资源管理 treats staff as the firm's most valuable asset — to be developed and motivated. It uses training, involvement and long-term careers.

Both link to workforce planning 人力规划: working out the staff the firm will need, and how to get them.

The management of change 变革管理 works best when employer-employee relations 劳资关系 (the link between bosses and workers) are good.

A trade union 工会 is an organised group of workers that speaks for its members. Through collective bargaining 集体谈判, the union and the employer negotiate pay and conditions for the whole group, instead of one worker at a time. If talks fail, workers may take industrial action 劳工行动, such as a strike 罢工 (stopping work). Good relations and fair negotiation avoid this and keep the business running.

A supermarket: retailers use data to compete on price, range and customer experience.

Marketing analysis 营销分析 means using data to understand the market and to make better marketing decisions. At A Level you study some numbers tools: sales forecasting, time-series analysis, correlation, and elasticity.

Sales forecasting 销售预测 is predicting future sales from past data and market knowledge. Good forecasts help a firm plan production, staff, stock and cash.

Time-series analysis 时间序列分析 studies past sales recorded over time to find a pattern. It has two main parts:

• the trend 趋势 — the general direction of sales over the long run (up, down or flat).
• the seasonal variation 季节性波动 — the regular rise and fall within a year (e.g. ice cream sells more in summer).

To find the trend, firms use a moving average 移动平均, which smooths the ups and downs by averaging several periods in a row. The seasonal variation is then how far the actual figure sits above or below the trend:

Actual sales wobble seasonally around a smooth underlying trend

A forecast extends the trend into the future (called extrapolation 外推) and then adds the usual seasonal variation. This works only if past patterns continue, so forecasts are never certain.

Correlation 相关性 measures how strongly two things move together — for example, advertising spending and sales.

• positive correlation 正相关 — when one rises, the other rises too.
• negative correlation 负相关 — when one rises, the other falls.

Positive correlation (both rise together) and negative correlation (one rises as the other falls)

Strong correlation helps a firm predict, but it does not prove that one thing causes the other. Other factors may be at work.

Elasticity 弹性 measures how much demand reacts to a change. Three types guide marketing decisions.

• price elasticity of demand 需求价格弹性 (PED) — for a price elastic 富有弹性 product, cutting the price raises total revenue; for a price inelastic 缺乏弹性 product, raising the price raises total revenue.
• income elasticity of demand 需求收入弹性 (YED) — tells a firm how sales will change as incomes rise or fall, which helps plan for booms and recessions.
• cross elasticity of demand 需求交叉弹性 (XED) — tells a firm how a rival's price change, or the price of a partner product, will affect its own sales.

So elasticity helps a firm set prices, choose products, and predict the effect of a competitor's move.

Digital advertising screens — marketing increasingly happens online and on screens.

A marketing strategy 营销战略 is the long-term plan for how marketing will meet the firm's objectives. Marketing planning 营销规划 is the work of setting that plan: studying the market, choosing target customers, and deciding the marketing mix. Two tools shape strategy: Ansoff's matrix and product portfolio analysis.

Ansoff's matrix: four growth strategies, with risk rising to the bottom-right (diversification).

Ansoff's matrix 安索夫矩阵 shows four ways to grow, by mixing existing or new products with existing or new markets. The risk rises as you move away from what you know.

Ansoff's four growth strategies — risk rises from market penetration to diversification

Market penetration is the safest; diversification is the riskiest because both the product and the market are new.

Product portfolio analysis 产品组合分析 looks at the firm's whole range of products together, using a tool like the Boston Matrix. It checks the balance: a firm needs some steady earners to fund its risky new products. The aim is a healthy mix, so the firm is not left with only ageing products.

To grow, many firms sell abroad. Globalisation 全球化 (the world becoming more connected) has made this easier. A firm can enter a new country by exporting 出口, by setting up a joint venture 合资企业 with a local partner, or by opening its own branch there.

But a strategy that works at home may need changes. Localisation 本地化 means adapting the marketing mix to the new market — for example, changing the product, the language, the price, or the way it is sold to suit local tastes, laws and incomes.

Where a business sits affects its costs, its sales and its staff. Choosing a place is called location 选址; moving to a new place is relocation 迁址.

Factors that influence the choice fall into two groups:

• quantitative factors 定量因素 — things you can measure in money, such as rent, wages, transport costs and government grants.
• qualitative factors 定性因素 — things that are harder to measure, such as the skills of local workers, nearness to customers or suppliers, and the owner's own wishes.

A firm picks the place where the benefits, money and non-money together, are greatest.

Many firms now locate abroad. Moving production to another country is offshoring 离岸外包. The reasons are often lower wages, nearness to new markets, fewer rules, or government help. The risks are longer supply lines, language and culture differences, and possible damage to the firm's image.

As a firm grows, its average cost first falls (from economies of scale) and later rises (from diseconomies of scale). The optimum scale 最优规模 is the size at which the average cost per unit is at its lowest.

• economies of scale 规模经济 — cost savings from being larger (e.g. bulk buying).
• diseconomies of scale 规模不经济 — rising average cost when a firm grows too big (e.g. poor communication).

A firm should try to grow up to its optimum scale, but not beyond it.

The optimum scale is the output where average cost per unit is lowest

Quality 质量 means how well a product meets the customer's needs. Good quality wins repeat custom, lets the firm charge more, protects its brand, and cuts the cost of waste and returns. Poor quality loses customers and damages the firm's name.

Quality control finds faults late, after money is already spent. Quality assurance and TQM try to stop faults happening, which is usually cheaper in the long run.

Quality control checks at the end; quality assurance builds quality into every stage

Factory automation — A-Level operations covers lean production, technology and the supply chain.

Lean production 精益生产 means making products with the least possible waste 浪费 — of time, materials, space and effort. Methods like just-in-time and continuous improvement cut waste, lower cost, and raise quality. Less money is tied up in stock, and problems are fixed quickly.

Capacity management 产能管理 means matching what the firm can produce to the demand it faces. If demand is higher than capacity, the firm may add shifts, hire staff or outsource; if demand is lower, it may cut output or find new orders. New technology 技术, such as automation and data systems, helps a firm produce more, to a higher standard, at a lower cost.

Critical path analysis 关键路径分析 (CPA) is a tool for planning a project made of many tasks. It draws the tasks as a network of arrows and nodes 节点 (circles), in the order they must happen. For each task it works out timings:

• the earliest start time 最早开始时间 (EST) — the soonest a task can begin, once earlier tasks are done.
• the latest finish time 最晚完成时间 (LFT) — the latest a task can finish without delaying the whole project.

From these comes the total float 总浮动时间 — the spare time a task has before it delays the project:

The critical path 关键路径 is the chain of tasks with zero float. These tasks cannot be late, or the whole project is late. Adding up the times along this path gives the minimum project duration 最短项目工期 — the shortest time the project can take.

The critical path is the chain of activities with zero float — they set the project's length

CPA helps managers find the tasks that matter most, order resources for the right time, and see where delays would hurt. But it is only as good as the time estimates it is built on.

Financial statements 财务报表 are the official records that show how a business is doing with money. You study two of them: the income statement and the statement of financial position. By law, companies must publish these each year.

Financial statements and ratios let stakeholders judge a firm's performance.

The income statement 利润表 shows the revenue 营业收入 and costs of a business over a period (usually a year), and the profit left at each stage.

• cost of sales 销售成本 is the direct cost of the goods that were sold.
• gross profit 毛利润 is what is left after taking cost of sales from revenue.
• after taking off expenses 费用 (such as rent, wages and marketing), you get the operating profit 营业利润.
• after interest and tax, what is left is the net profit 净利润 (the profit for the year).

The income statement steps down from revenue to net profit

The statement of financial position 财务状况表 (also called the balance sheet 资产负债表) is a photo of what the business owns and owes on one day.

• non-current assets 非流动资产 — items kept for more than a year, such as buildings and machines.
• current assets 流动资产 — items that become cash within a year, such as inventory and money owed by customers.
• current liabilities 流动负债 — debts due within a year.
• non-current liabilities 非流动负债 — debts due after more than a year, such as a long loan.
• equity 所有者权益 — the money the owners have put in, plus profit kept in the business.

The two sides always balance: what the firm owns is funded by what it owes plus the owners' equity.

The two sides always balance: assets equal liabilities plus equity

Depreciation 折旧 is the way the cost of a non-current asset is spread over the years it is used, instead of all in the year it was bought. For example, a £10,000 machine used for five years may lose £2,000 of value each year. Depreciation lowers the asset's value on the statement of financial position and counts as an expense on the income statement, so profit is not overstated.

Straight-line depreciation lowers the asset's value by the same amount each year

Different stakeholders 利益相关者 read these statements for different reasons:

• owners and investors check the profit and the return on their money.
• lenders check whether the firm can repay its loans.
• managers use them to make decisions and set budgets.
• the government checks the tax due; suppliers check the firm can pay.

A single number means little on its own. Ratio analysis 比率分析 links two figures from the statements to judge performance, and lets you compare one year with another, or one firm with another.

Profitability 盈利能力 ratios show how good the firm is at turning sales and capital into profit.

A higher gross profit margin 毛利率 or operating profit margin 营业利润率 means more profit is kept from each sale. The key overall measure is return on capital employed 资本回报率 (ROCE), which compares profit with the money invested:

Here capital employed 所用资本 is the total long-term money in the business. A higher ROCE means the money is being used well.

Liquidity 流动性 means how easily a firm can pay its short-term debts. Two ratios test it.

The current ratio 流动比率 of about 1.5–2 is usually safe. The acid test ratio 速动比率 is stricter because it removes inventory, which can be slow to sell. Too low is risky; too high may mean cash is sitting idle.

Efficiency 效率 ratios show how well the firm uses its resources — for example, inventory turnover 存货周转率 measures how many times a year the firm sells and replaces its stock. Faster turnover usually ties up less cash.

Gearing 杠杆比率 shows how much of the firm's long-term money comes from borrowing rather than from owners:

High gearing means heavy borrowing — risky if interest rates rise, but it can boost returns when times are good.

Ratios are useful but limited. They use past data, which may not predict the future. They ignore non-money factors like staff morale and brand strength. And a fair comparison needs firms of similar size in the same industry.

Investment appraisal 投资评估 is the study of whether a big spending project (such as a new machine or factory) is worth it. Three methods are used.

• the payback period 回收期 is the time it takes for the project's cash inflows to repay the initial cost. A shorter payback is safer.

The payback period is when cumulative cash flow climbs back to zero

• the accounting rate of return 会计回报率 (ARR) shows the average yearly profit as a percentage of the money invested:

• the net present value 净现值 (NPV) recognises that money in the future is worth less than money today. It uses discounting 折现 to shrink future cash flows back to today's value, then takes away the initial cost. A positive NPV means the project adds value.

Each method has strengths: payback is simple and focuses on risk; ARR shows profitability; NPV is the most complete but needs a chosen discount rate.

At the top level, managers use financial data and budgets to choose between strategies. Before a big decision, they ask: can we afford it, how will it affect profit, cash flow and gearing, and what is the likely return? Financial information turns a risky guess into a reasoned choice — but numbers are only part of the picture, and must be weighed with the market, the staff and the firm's objectives.